Oklahoma City Attorney Assisting Clients With Debt Consolidation
Filing for bankruptcy is not the only way that you can seek financial relief in Oklahoma City. If you are in debt, it’s important to consider all of your options, including debt consolidation. This is an alternative to bankruptcy that may help you pay down your balances and manage your debts.
There are two main types of debt consolidation:
- Debt Consolidation Loans
- Debt Consolidation Repayment Plans
Learn about each of these options—and whether or not they are right for you—by scheduling a free consultation with the debt consolidation attorneys at Mitchell & Hammond today.
What Are Debt Consolidation Loans?
A debt consolidation loan is a type of low-interest loan. The money acquired through a debt consolidation loan is used to pay off high-interest credit card debt and other types of debt. Taking out a debt consolidation loan will not get rid of your debts, but it will save you money. This is because the debt consolidation loan has a lower interest rate than your other debts, so you will end up paying less in interest over time.
Securing a debt consolidation loan also makes repaying your debts more convenient. You won’t have to make multiple payments every month. Instead, you will simply need to make one payment on your debt consolidation loan per month. This makes it easier for you to pay your bills so you shouldn’t have trouble remembering to make on-time payments.
There are some disadvantages to taking out a debt consolidation loan. If your debt consolidation loan is secured by collateral, you could lose your personal property if you fail to make on-time payments. Furthermore, it’s important to understand that the interest rates on some debt consolidation loans will slowly increase over time. As a result, you may not save as much money as you expected if you take out one of these loans without reading the fine print.
What Are Debt Consolidation Repayment Plans?
The second debt consolidation option is a repayment plan. This option involves working with a third party that will negotiate with your creditors on your behalf. Ideally, the third party will successfully negotiate with your creditors to lower your interest rates, penalties, and balances. If you choose this method, you will not make direct payments on your debts. Instead, you will pay the third party to make payments on your behalf.
There are several benefits and drawbacks to this option. Having a repayment plan makes it easier to pay your debts since you will only have to make one payment per month. This also simplifies the process of managing your finances. This method can also help you save money if the third party successfully negotiates lower rates, balances, or fees.
However, a debt consolidation repayment plan will typically appear on your credit report. This means enrolling in one of these plans could lower your credit score and make it more difficult for you to secure new lines of credit in the future. In addition, enrolling in a debt consolidation plan will not protect you from lawsuits and other adverse actions related to your outstanding debt.
When is Debt Consolidation the Right Choice?
It’s in your best interest to consider debt consolidation before filing for bankruptcy. However, this option is not right for everyone. Debt consolidation will help you manage your debts, but it will not address the underlying issues that caused you to incur debt. In general, our debt consolidation attorneys only recommend this option if:
- You are committed to spending wisely and sticking to your budget.
- You have enough disposable income to make monthly payments.
- Your debts are long-term, which means they will not be paid off in the next year even if you make regular monthly payments.
- You are dedicated to changing your ways and never incurring a lot of debt again.
Everyone’s financial situation is unique, so talk to a debt consolidation attorney at Mitchell & Hammond to determine whether or not you are a good candidate for either a loan or repayment plan.
Schedule A Free Consultation With Our Debt Consolidation Attorneys in Oklahoma City
If you’re struggling to repay your debts, seek legal representation from the bankruptcy attorneys at Mitchell & Hammond as soon as possible. Let our debt consolidation lawyers review your information to determine the best way for you to move forward and take control of your finances. With our help, you can finally reach your financial goals. To schedule a free consultation, call 405-216-0007 or submit your information via the form on this website.